Berkshire Hathaway Halts Bank of America Sell-Off
Greg Abel has slowed the sale of Bank of America shares following a Federal Reserve rate-hiking cycle that improved the bank's income outlook.
CEO Greg Abel has maintained a significant position in Bank of America despite a period of aggressive divestment. Following the retirement of Warren Buffett on December 31, Abel began reducing the investment portfolio of Berkshire Hathaway, which included selling 16 stocks during the first quarter.
Since July 2024, the company sold over 549 million shares of Bank of America, reducing its original 1.03-billion-share position by 53%. Early signs suggested a total exit from the holding, as Abel omitted the bank from his first annual shareholder letter.
Recent market shifts have altered this strategy. A pullback in the share price to a 30% premium to book value, combined with a rate-hiking cycle initiated by the Federal Reserve System on September 16, is expected to increase the bank's net interest income. These conditions have made the holding more attractive to Berkshire Hathaway, leading to the current pause in selling.
